​Forint Outperforms CE3 Peers Amid Broader EM Weakness

The forint sits close to the top of the EM pile today, though the greenback is seeing gains across the board in the emerging markets space. Nevertheless, EURHUF sits 0.2% lower, below both yesterday's lows and support at the 50-day EMA, which intersects today at 381.36. Elsewhere, both PLNHUF and CZKHUF trade at the lowest levels since July and below 50-day EMAs.

• Notably, yields on 5Y local bonds have fallen 12bps on the day to their lowest level since June 2022. Yields across the curve are down between 4-13bps, compared to higher yields seen in both core FI and in most of Hungary’s regional peers.
• While the NBH offered little explicit forward guidance in their policy statement yesterday, Deputy Governor Virag said in his presser that market expectations of future policy decisions are “excessive” and that future decision will be made on a data-dependent basis, potentially suggesting that rate cuts in the future will be of smaller magnitude. Additionally, inflation is expected to fall to single digits, meaning real interest rates will soon move to positive territory – a move which be supportive of the forint. Our full review of the decision will be released later today.